A “last will and testament” is a legal document that contains instructions on how your property (legally known as your “estate”) should be distributed when you die. By spelling out exactly how you would like your estate handled in the event of your death, a will provides peace of mind for yourself and your loved ones. Here are the top ten reasons to make a will.
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1. Decide How Your Estate Will Be Distributed
A person who makes a will is known as a testator, and those who die without a valid will are said to have died “intestate.” If you die without a will, your estate is distributed according to your state’s intestacy laws. There is no guarantee that these state laws will align with your wishes. The easiest way to avoid this problem is by drafting a will.
2. Decide Who Will Take Care of Your Minor Children
A will allows you to decide who will take care of your minor children in the event of your death. If you do not make this decision in a will and the child’s other parent is not living or available, a court will appoint a guardian. The guardian will most likely be selected from among your family members. However, you know your child best and are probably in a better position than a court to make sure your child does not end up in the wrong hands.
3. Facilitate the Probate Process
Probate is the legal process wills go through to ensure they are valid. The term also refers more generally to the court-supervised process of distributing an estate.
Contrary to popular belief, probate is not always lengthy or expensive. This depends greatly on the size and value of your estate. That said, a clearly drafted will can minimize the delay. For example, if a disgruntled family member “contests” the distribution because they believe they deserve a larger share of your estate, your will can quickly settle the dispute.
4. Minimize Estate Taxes
The process of drafting a will early on provides an opportunity to explore various estate planning tools to minimize your estate taxes. You can also explore ways to reduce the inheritance taxes your loved ones may have to pay when they receive property from your estate. This is particularly useful if you have a very valuable estate that exceeds the federal estate tax exemption.
5. Decide Who Will Administer Your Estate
The person responsible for administering your estate is known as your personal representative. If you do not appoint this person in a will, a court will appoint one for you. Either way, this person is responsible for things like paying your debts, shuttering your bank accounts, canceling your credit cards, and distributing your estate.
Needless to say, this is a position of great trust. A will allows you to appoint someone you know to be responsible and competent. Many people select family members as personal representatives. However, this is not mandatory and may not always be the best option if you are worried about family disputes.
6. Disinherit Individuals You Do Not Want To Receive Your Property
Again, if you do not leave a will behind, probate courts will distribute your estate according to state intestacy laws. These laws create a hierarchy of inheritance among your surviving relatives (known as your heirs) that may not reflect the most current state of affairs between you and your family members.
A will provides an opportunity to specifically include people (known as beneficiaries) who intestacy laws would otherwise leave out. It also allows you to disinherit heirs who would otherwise be included. Make sure your instructions are drafted clearly and unmistakably to help silence family disputes down the road.
7. Make Gifts and Donations
In addition to distributing your estate to your family, a will also allows you to make donations to charitable causes. Further, gifts up to certain amounts may also reduce your estate tax. When drafting your will, make sure you check for the most up-to-date gift tax exclusions.
8. You Can Always Update Your Will
Once you draft a will, it can be updated as your life circumstances change. Your most recent valid will is normally the most authoritative. There are many reasons you might need to update your will. Examples include the birth of a new child, the death of a relative, and divorce.
9. Avoid Legal Challenges
A valid will is a binding document that voices your desires when you are no longer around to speak for yourself. If you’ve read through this entire article, you probably get the gist already. It is worth emphasizing just once more. A well-drafted will reduces the risk of legal challenges.
10. Tomorrow Is Not Promised
A will is an important document that acts as the foundation of your estate plan. Do not procrastinate. Once you pass away, the opportunity to make a will is gone. The result is often a great deal of stress for your surviving family members in a very emotional time.
Next Step: Draft Your Will
This article covers just ten reasons to draft a will. There are more, and you should not hesitate to begin the process soon.
Most estates are not extremely complex. In these cases, you can save time and money by drafting your will using our do-it-yourself estate planning tools. Be sure to read What Not To Include When Making a Will for more information. If you still have questions, you can seek legal advice from an estate planning attorney near you.